Ahead of the summer season and to meet the extra demand during election campaign, the Indian Government has raised the monthly sugar quota to 25 lakh tonnes (lt) for April against 23.5 lt for March and 22 lt released for February. The Government decides on the quantity of sugar to be sold in the domestic market every month and accordingly allocates a quota for each mill.

According to the Food Ministry’s notification, some 198 mills in Maharashtra have been allotted 9.37 lt, while 119 mills in Uttar Pradesh received a quota of 7.28 lt and 71 mills in Karnataka have got 4.10 lt sugar quota for April. A total of  168.5 lt sugar has been allocated to mills for domestic sales between October 2023 and April 2024. Besides, there are reports of some mills selling more than the allotted quantity during December and January.

“Demand for sugar is always higher in summer and festival period. These two factors are taken into account while allocating the overall monthly quota. But, this time the election campaign has already started and this is an extra demand which has also been factored in while deciding the April quota,” a source said.

More allocation on cards?

For April 2023, the government had initially released 22 lt quota and after a few days allocated additional 2 lt for the same month. So, there is also a possibility of further allocation for April 2024 over and above 25 lt, an industry official said.

In the official order issued by the Food Ministry on March 27, the Government also said it has cut the allocation of some sugar mills by 25 per cent of their eligible quota after finding that these companies sold more than they were allotted in January. There are 36 sugar mills in the list whose quotas are cut while 22 mills in Maharashtra and 15 mills in Karnataka have also got lower allocation due to violation of stock.

‘Friendly match’

However, an official of a leading sugar company of Uttar Pradesh, whose quota has been cut by 25 per cent, said the Government was not increasing the quota for it despite request as the mill’s revenue was impacted by higher production from a year ago as well as violation of quota rules by competing mills. “It is a friendly match between government and sugar mills as at the end of the day both shake hands and both know each other’s compulsion,” the official quipped.

The government has asked all sugar mills to get their actual stock verified as on March 31 from the Authorised Officer of their respective State Cane Commissioner before April 10 and fill the P-ll form online on the National Single Window System (NSWS) portal. If any sugar mill fails to submit PII form for the month of March by April 15, no quota will not be released to that mill for May. The ministry, further, asked sugar mills and distilleries to submit information related to ethanol production from B-heavy, sugar syrup, sugarcane juice on the NSWS portal